Texas REALTORS® provides FAQs and resources to help you in your property management business. Read on for answers to common questions and information on where to find tools you can use.

Can a residential tenant terminate an executed lease due to COVID-19?

No. The Texas REALTORS® Residential Lease (TXR 2001) provides that unless otherwise provided by law, the tenant is not entitled to early termination due to voluntary or involuntary job or school transfer, changes in marital status, loss of employment, loss of co-tenants, changes in health, purchase of property, or death. No laws are currently in place that allow a tenant to terminate early due to COVID-19-related reasons.

The landlord for the property I manage wants all potential tenants to submit a photo ID with their lease application. Can I require that?

Yes, but you should only use applicants’ photo IDs to verify their identities and/or to check on criminal history, rental history, or credit history. You must be uniform and consistent with your photo ID policy, requiring it from all applicants. Never use the photo ID to discriminate against an applicant.

I manage rental properties for a client who doesn’t want people smoking on his property. If we deny potential tenants’ applications because they smoke, will this violate any federal fair-housing laws?

No. Federal fair-housing laws make it illegal for the landlord to choose tenants based on their race, color, sex, national origin, religion, handicap, and familial status. However, people who smoke are not a protected class. A landlord can refuse to lease to potential tenants who smoke as long as the landlord consistently enforces such prohibition.

Can a non-U.S. citizen own rental property in Texas?

Yes. There is no requirement that a person be a U.S. citizen to own rental property in Texas.

Can I serve as a property manager for rental property owned by a non-U.S. citizen?

Yes. A Texas license holder can manage properties in Texas whether the owner is a U.S. citizen or not. Property managers, however, should be aware of IRS requirements concerning the rental income of foreign persons. Unless a foreign person has identified the rental income on IRS Form W-8ECI (which requires a valid U.S. tax identification number for the foreign landlord) and provided a copy of the form to the property manager, the property manager should withhold 30% of collected rental payments. Withholdings, if any, must then be timely remitted to the IRS. A property manager who fails to do this may face personal liability for the tax amounts that should have been paid, plus interest, penalties, and criminal sanctions. Property managers also have an obligation each year to report annual rents collected on behalf of foreign persons on IRS Forms 1042 and 1042-S.

A prospective tenant for a property I manage uses a wheelchair. He wants to build a ramp to the front door, widen two bathroom doors, and install grab bars in the bathroom. If he becomes a tenant, what modifications does the owner have to allow?

The landlord must permit reasonable modifications necessary to afford a tenant who is disabled full enjoyment of the property, such as the modifications described.

To protect both parties, the lease should address who will arrange for the modifications, who will make decisions regarding workers and materials, and who will pay for the modifications. For example, the lease may provide that the tenant will pay the cost either directly to any contractor or by reimbursement to the landlord, or the lease may provide that the landlord will make the modifications in exchange for a concession, such as an increase in the rent based on the cost of the modifications.

The lease should also cover whether the property will be restored when the tenant moves out and, if it will, who will pay for the cost of such restoration.

A tenant called me complaining that his roof was leaking. The owner gave the go-ahead for me to hire someone to fix the roof. The contractor fixed the roof and gave me a bill with a discount if the bill is paid within two weeks. If I pay the bill within two weeks, but the owner can’t pay me until after two weeks, can I get the discount for paying early but then charge the owner the regular price, keeping the difference for myself?

You may do this only with the informed consent of your client. TRELA Section 1101.652(b)(13) provides that a license holder’s license may be suspended or revoked if the license holder accepts, receives, or charges an undisclosed commission, rebate, or direct profit on expenditures made for a principal. Also, Article 6 of the Code of Ethics prohibits REALTORS® from accepting any commission, rebate, or profit on expenditures made for their principal without the principal’s knowledge and consent.

A tenant says that the house is haunted. She wants to vacate. What is the best way to address the issue?

Inform her that she may be in breach of the lease if she vacates. Tell her that the landlord may exercise the default remedies under the lease. (The landlord must employ reasonable measures to mitigate any loss.) You might try to determine why she believes the house is haunted and see if there is a reasonable explanation for any mysterious circumstances. Also, ask her to provide written explanations and requests for your records.

I received a rental application for a property I manage and presented it to the owner. He wants to wait before deciding on this applicant to see if a better match to the tenant-selection criteria comes along. How long does he have to make a decision on this prospective tenant’s application?

In this situation, the landlord has seven days to make a decision on a rental application; otherwise, the applicant is deemed rejected and any application deposit should be refunded, although the application fee is generally nonrefundable.

According to the Texas Property Code, if the landlord provided an application form, the seven-day period begins on the date the applicant submits the completed form. If the landlord did not provide an application form, the seven-day period begins on the date the property owner accepts an application deposit from the applicant.

Remember, when an applicant is provided with a rental application, the landlord is required to make printed notice of the landlord’s tenant-selection criteria available to the applicant. If the applicant was rejected and the landlord failed to make the criteria available, the application fee and any application deposit must be returned.

Texas REALTORS® has a model tenant-selection criteria form for members’ use.

The tenant for a property I manage asked the landlord to replace carpet in a room because she says it looks worn and needs repair. Does the landlord have to replace it?

No. Neither the Texas Property Code nor the Texas REALTORS® Residential Lease (TXR 2001) would require a landlord to replace or repair something like this.

While Paragraph 18D(1) of the Texas REALTORS® Residential Lease states that the “landlord will pay to repair or remedy conditions in the property in need of repair if the tenant complies with the procedures for requesting repairs,” this does not mean that the landlord has the obligation to make every requested repair. Paragraph 18D(2) of the lease states that a landlord will not pay to repair “items that are cosmetic in nature with no impact on the functionality or use of the item.” A landlord could argue that worn carpet falls under this category. Additionally, Paragraph 18C(1) states that all decisions regarding repair are at the landlord’s sole discretion.

A tenant notified me yesterday that his water heater stopped working. A technician came today, but the water heater requires a part that won’t arrive until tomorrow. The tenant is upset and wants the landlord to pay for a hotel room for tonight. Is the landlord obligated to do this?

No. Nothing in the Texas Property Code or Texas REALTORS® Residential Lease (TXR 2001) requires the landlord to put the tenant in a hotel while repairs are being made. A landlord isn’t obligated to provide alternative housing for a tenant based on a needed repair, even if that repair relates to a condition that could be construed as materially affecting the physical health and safety of the ordinary tenant.

If the landlord fails to make a diligent effort to remedy a condition that materially affects the physical health and safety of an ordinary tenant, the tenant’s remedies are found in Section 92.056 of the Texas Property Code.

What if some but not all of the tenants renting a particular property move out? Am I still required to rekey?

No. Tenant turnover date is defined as the date a tenant moves into a dwelling under a lease after all previous occupants have moved out. In this scenario, not all previous occupants have moved out of the property.